Namibia Advances CBDC Project Despite IMF Skepticism

Namibia is advancing its retail CBDC project, focusing on financial inclusion and cross-border payments, despite IMF skepticism. The Bank of Namibia is evaluating public interest in digital currencies and partnering with other central banks to enhance financial services in the region.

Namibia is advancing its retail central bank digital currency (CBDC) project despite skepticism from the International Monetary Fund (IMF). The Bank of Namibia (BoN) reported that it is currently in the preparation phase of developing a digital Namibian dollar, with objectives centered on enhancing financial inclusion and improving cross-border payment capabilities.

Kazembire Zemburuka, BoN’s director of international relations, indicated that the bank is evaluating public interest in both retail and wholesale CBDCs. Additionally, the bank is assessing potential challenges and risks associated with these digital currencies, as well as desired features from prospective users, based on local media insights.

Although the BoN is collaborating with various stakeholders, including the IMF, a January report from the IMF advised against launching a digital currency. The report pointed out a lack of strong support for retail CBDC issuance and recommended refraining from advanced technological endeavors until clear benefits are established.

The BoN acknowledges that while a digital dollar cannot resolve all financial issues such as inadequate infrastructure and low financial literacy, it still has potential in enhancing the provision of financial services within Namibia. Zemburuka stated that, despite integration challenges with current payment systems, the bank perceives CBDC as a valuable addition to the digital payment landscape.

Further, BoN is working with neighboring central banks, such as the South African Reserve Bank and the Bank of Lesotho, highlighting the importance of cross-border CBDC transactions. Namibia is joining other African nations, like Ghana and Nigeria, in the exploration of digital currencies aimed at promoting financial inclusion.

In summary, Namibia is proceeding with its CBDC initiative despite IMF concerns, focusing on financial inclusion and cross-border payments. The Bank of Namibia is actively evaluating public interest and potential challenges while partnering with regional central banks. This step signifies Namibia’s commitment to enhancing its financial landscape, in line with broader African initiatives in digital currency adoption.

Original Source: coingeek.com